We have a massive disconnect between the people who are accessing public services locally and the organisations that deliver them. Changes need to be more than bureaucratic; they need fundamentally to alter the relationships not just between central and local government but with the people who use those public services. That is why it is depressing when there is an amusing bit of knockabout in the Chamber on familiar issues-revaluation being the obvious one-when the subject is a complete red herring, with people arguing at cross purposes and both sides holding intellectually unsustainable positions. It is not possible to say, "We think that the council tax system is great, but we think that revaluation is bad." If we want to keep the council tax system then we must, as my hon. Friend the Member for Somerton and Frome (Mr. Heath) has 3 Feb 2010 : Column 390
said, have regular revaluations. That is part of the system. If we do not like revaluations, we must rethink the matter and decide what is the most suitable way of raising taxes locally. It is embarrassing to hear the fake arguments about what is being considered and what is being done. If people really believe that council tax is the right system, they should stand up for the revaluation system.

In our previous debates on this issue, the most recent of which was on a Conservative Opposition day, the Conservatives have done an absolutely fine job of analysing the problem, but if they think that they will be in a position to run a Government, they need some ideas. Just being able to tell a good story is not enough. Their stance on the council tax freeze is a prime example of how they really do not get it. They are quite happy to talk about localism and to use some of the rhetoric that they think sounds great, but a council tax freeze would mean more centralised funding for local government and less local discretion over the delivery of public services. Their stance on that issue completely contradicts what they say they believe, and is nonsense.

The Conservatives' proposal on planning is also nonsense. They want to replace central pressures on house building with financial pressures. If one sets that idea in the context of what I said about the IFS "Green Budget", we are again talking about massive financial pressures on councils to approve huge developments, because that is the only way in which they will get additional income. In my view, housing policy should be based on what the local population needs, not on centrally driven targets or what are basically financial bribes. The priority should be local need, and policy should not be driven by financial incentives or central targets.

As far as I can work out, the Government's approach to this issue has been displacement activity. There has been a bureaucratic response, but what really needs to be addressed is how people are consulted, how decisions are taken about the delivery of public services and how money is raised. A classic example of the situation is provided in a document published by the Cabinet Office, rather than the Department for Communities and Local Government, which exemplifies the kind of approach that the Government take. I shall be interested to hear from the Minister how effectively she thinks the "Smarter Government" document and its implementation will help to engage communities on what will be difficult issues. There is a chapter on dealing with local priorities, and page 38 talks about how the Government will improve such relationships. One section states:

"We will align the different sector-specific performance management frameworks across key local agencies-the NHS, police, schools and local government-thereby increasing the focus on indicators relating to joint outcomes. We will set out in Budget 2010 the key areas where frameworks for specific frontline sectors can be further aligned."

If that is a good example of engaging people, sorting out local government and making it more accessible, and if that is the kind of bureaucratic approach that will be taken, then we have a depressing world to look forward to.

Another area in which such ideas are being investigated is Total Place. I have a particular interest in this issue because of the many similarities to the Sustainable Communities Act 2007, which I presented as a Bill to Parliament in 2006, following up the excellent work of 3 Feb 2010 : Column 391
Sue Doughty, the former MP for Guildford. A key strand of the Act involves the provision of easily digestible local spending reports that contain details of all public spending at local level. The idea behind the reports was that once that information was in the public domain, members of the public would want to have a say in how it could be better spent. It was part of a process to turn decision making around and make it work on a bottom-up, rather than a top-down, basis. The Government have decided, perhaps because that idea did not come from the DCLG, that they do not want to implement it as quickly as the tens of thousands of people who supported that campaign wanted it implemented. However, Total Place provides a way in which that information can be made available in a better way than is being achieved in the local spending reports under the 2007 Act.

Again, the Government have missed the point. They are making localism a worthy way of having local area agreements with knobs on, but they are not thinking about how to use it as a tool for engaging people, and are not using their expertise to ensure that the right things are prioritised and that money is spent effectively. It is very frustrating that the Government have missed the fundamental point of adopting a localist approach in the first place.

Instead of inertia and denial about the terrifying future facing a lot of Departments, we need radical action. We need a simplified, localist system of public services that is easier for people to understand and influence. The current difficult financial situation makes that more important, not less.

The Liberal Democrats have put the localist agenda at front and centre of what we want to do, and that stands in direct contrast to the approach taken by Labour and the Conservatives. The Government's compartmentalised approach spreads across departmental silos, but it is also evident within Departments: today's debate has made it clear that the section of the DCLG that deals with localism and participation does not feel any need to work with the section that deals with local government finance. The localist agenda must cut across both this and other Departments, although I am not convinced that that happens. It is beginning to happen with the Total Place initiative but, unfortunately, as with a lot of things, that is driven by the Treasury.

We need to encourage more cross-departmental thinking. The localist agenda is important now because some painful, difficult and controversial decisions will have to be taken on the delivery of local public services. Inevitably, they will have an impact on the front line in one way or another. We hear a great deal about how problems can be dealt with by efficiency gains, but that is not so-there will be dramatic cuts.

The IFS has shown how deep those cuts will have to be if we get a Labour Government after the general election, although a Conservative Government is likely to be even worse. The cuts will be really painful if the current set-up does not change. They will be imposed on communities, without involving or being properly accountable to the people in them.

The interim findings of the Total Place pilot revealed that councils spend an average of £7,000 per person on public services, of which only £350 is discretionary spending. There are likely to be a huge number of 3 Feb 2010 : Column 392
changes over which people will feel that they have no influence or say. It is important that that does not happen.

We need public services that are designed for, and accountable to, the people who use them, whereas currently we have a system that is designed for the benefit of the organisations involved in delivering them. The emphasis seems to be on administrative convenience, not on the interests of the people who use the services. A fundamental shift needs to happen, and it must cut across a variety of different areas. The tax system must change, so that the taxes that we pay locally no longer disappear into the Treasury to be spent elsewhere. We can achieve that by localising business rates and moving to a system of local income tax, although we would like to allow the councils that are keen to trial that system to pilot it first.

Money that currently goes to remote and unaccountable organisations could be redirected towards putting local communities in charge of economic regeneration. In addition, the housing revenue account needs to be sorted out, so that councils have greater freedom to borrow and invest in council housing. We also need to give people a proper say on decisions that affect them in other areas.

The approach that I am outlining would get rid of unaccountable quangos, but it would also have implications for electoral reform. The Prime Minister may have had a deathbed conversion to that yesterday, but he seems to be interested only in the Westminster Parliament. If we are serious about engaging people in politics, we must realise that there are thousands of politicians around the country who are in the same boat as we are.

People will have their faith and confidence in politics restored if politicians of all kinds go out and prove to them, on their doorsteps, that their vote counts and will make a difference. I was therefore very disappointed that yesterday we saw only baby steps taken for the Westminster Parliament. No such steps were taken at the level of local government, even though some progress in that direction has been made in Scotland. We should remember that the crisis in confidence in politics is not exclusive to Westminster.

That is the kind of debate that we should be having about the future of local government finance, and of local government more widely. I am disappointed that the Government have not proposed ways to deal with the fiscal crisis that we face and to ensure that people have a say and a stake in the process. The Government continue to assume the worst of local authorities and local people, while presuming that every action taken by central Government is in the best interests of those people and is the best possible outcome, which is certainly not the case. As we go forward into a fiscally tight situation, that is even more important.

Labour should have come clean on what their proposals will mean for local government, instead of denying that there is any problem with the current set-up. It seems that the Conservatives are intent on cheering them on in that double delusion. We need real change for a fairer, greener and more local system of politics.

6.5 pm

Mr. Neil Turner (Wigan) (Lab):
I welcome the settlement. It is an extremely good settlement for local government and builds on more than 10 years of above-inflation 3 Feb 2010 : Column 393
grants to local government. It is particularly welcome because the circumstances in which it was first mooted are very different from the present circumstances.

In the 1980s and 1990s, when the Conservative Government's home-grown recessions were putting pressure on local government, I remember the kind of things that they were doing. It must have been a temptation for my right hon. Friend the Secretary of State to follow their lead, with cuts in money, cuts in the percentage of funding that was given to local authorities, and cuts in the freedom of local authorities to act.

I was a councillor in the 1980s and 1990s and my local authority, Wigan metropolitan borough council, was losing £8 million to £10 million year on year because of the way in which the Conservative Government dealt with the recession. There was no planning or forward thinking. We got the first indication in November or December and confirmation in February, and we had to start planning our cuts from 1 April. It was a disaster. Cuts were implemented with no thought given to efficiency. It was inexcusable. Programmes were abandoned halfway through because we had been told that we could not have that kind of money. The Government could have done the same this year.

Mr. Bailey:
I was chair of finance at Sandwell metropolitan council during those years. I reiterate my hon. Friend's point. After one settlement, we would start planning for the projected round of cuts in the next settlement. That continued for four or five years, and we ended up with large council tax increases combined with a slashing of public services to keep within the Conservative Government's revenue support grant.

Mr. Turner:
My hon. Friend replicates my account of my own experience, which is shared by many people who were councillors in Labour-controlled authorities, in particular. As was pointed out by my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey), who is no longer in her place, the Conservative Government used to gerrymander the system of grants to suit their own local authorities.

The Secretary of State could have done that, in response to the world recession that we are in, but he did not. Unlike the Eton old boys, we have learned some lessons. We learned not just in the 1980s and 1990s, but in the 1930s, that the way to make sure that we come out of a recession is not through public sector cuts, but by investing in that to slow the recession down and by investing to grow for the future.

The effect of the present policy, compared with the 1980s, is remarkable. In my borough, we have half the number of job losses that we had in the 1980s and 1990s, half the number of mortgage repossessions, and half the number of businesses going bust. Local government is a major factor in that. Obviously, central Government play a hugely important role, but local government is able to put the funds from central Government into ensuring that people's homes are protected, businesses are supported and jobs are saved.

Mr. Pelling:
Would not local authorities be even more effective at economic development if we returned to them what a Conservative Government took away, namely 3 Feb 2010 : Column 394
full discretion over business rates? They could then run their cities and towns competitively in order to attract business and prosperity.

Mr. Turner:
The proposal to return business rates to local government has a lot of merit, but it should not be considered in isolation. If we are to look at how local government is financed, we must do so in the round, rather than through a single issue, as I am sure the hon. Gentleman understands and agrees. However, I take on board his point about the return of the business rate to local government.

One major thing that we have done over the past few years is introduce the certainty of three years' funding, ensuring that local government is able to forward plan and develop strategic responsibilities. That has been a major element in the improved efficiency of all local authorities. The National Audit Office's figures show that almost every single local authority throughout the country, irrespective of party control, is more efficient and more effective than it was in 1997 at delivering its services. A major aspect of that has been the ability to plan three years on three years, rather than having to go hand to mouth as we did in the past. I do not know where the Opposition stand on that process, but it would be interesting to hear an indication-something that we could hang on to. Will they continue or abandon the three-year process?

Justine Greening:
Our concern is that the Government have abandoned the process. There is no comprehensive review and, apparently, no prospect of one. The hon. Gentleman would be better off asking the Minister whether his own Government have abandoned it, rather than asking the Opposition whether we will.

Mr. Turner:
The Government have not abandoned that process. Clearly, we have a problem with the comprehensive spending review, and we all know that, but it would be nonsensical to undertake a comprehensive spending review immediately before an election that could lead to a change in Government, as it would have been in an economic downturn, which could have been a depression if we had followed the economic advice of the Conservative party. The Government's policy is that the three-year settlement will continue from next year.

Despite the hon. Lady's intervention, there was no commitment from the Opposition to a three-year spending review or package, but if local government is to plan properly it needs that commitment. If you want to think about the things that local government needs, you really ought to think about that, rather than some of the nonsense that you were coming out with earlier.

Mr. Speaker:
Order. May I just gently say to the hon. Gentleman, as I said to the hon. Member for Croydon, Central (Mr. Pelling), that debate is conducted through the Chair? I know that the hon. Member for Wigan (Mr. Turner) did not intend to abuse me with the pejorative language that he just deployed, but it would be good if he avoided a repetition.

Mr. Turner:
Thank you, Mr. Speaker. Perish the thought that I would ever do anything to earn your wrath and ire.

I shall provide a couple of examples of what the three-year funding certainty has given us. First, on housing, we have 26,000 council houses in Wigan, and 3 Feb 2010 : Column 395
every single one has been brought up to the decent homes standard. We have been able to do so not only in the public sector, but in the private sector, where many thousands of houses have also been brought up to that standard. That is largely due not only to Government money, but to the certainty of being able to plan year on year.

Secondly, on education, we have been awarded a Building Schools for the Future programme in Wigan. That has now started, and we have a programme to rebuild every secondary school in the borough. I should also mention three primary schools: Canon Sharples, Woodfield and Westfield. For years under the Conservative Government, pupils at Woodfield were taught in timber huts, where in winter they were freezing and in summer they were sweltering. We have totally rebuilt that school under a Labour Government, and shortly we will start on Beech Hill primary school.

Most importantly of all, throughout the borough we have 19 Sure Start centres. These are not just glorified nursery schools; that is only part of the job that they do. They are also places where parents learn parenting skills. We do not live in a broken Britain-a silly, trite phrase; if we did not know better, we would think it was thought up by some second-rate advertising trainee-but we do live in a Britain where there are people and families who have very difficult problems, and Sure Start is one way of addressing those problems. Mums-many of them are 15, 16 or 17-year-olds-who come from dysfunctional families can go to Sure Start centres and start to learn how to be good parents and how to be communicative beyond their small peer group. They can learn social skills and, equally, the skills that can get them into work once their parenting responsibilities are less onerous.

Sure Start is absolutely essential to the long-term programme to give children from dysfunctional families, and those families themselves, a better start. They benefit from going from these facilities into much more modern primary schools, and then into modern secondary schools built under this Labour Government's Building Schools for the Future programme, which the Conservatives have not yet said that they would continue with in government; in fact, as I understand it, they would reduce it dramatically, if not scrap it completely. This is a whole package of long-term reform that will reap rewards not only next year but 10, 15 or 20 years down the line. It would be class vandalism for any party to stop or reduce any part of that investment in our people's future.

We have come a long way, but we could go further. We should implement not just a three-year settlement for local government but a rolling three-year settlement so that every year people will know three years in advance how much money they will be getting. Local government would then be able to plan even more effectively than it does now. I understand that it is not for the Department for Communities and Local Government to make that decision-it needs to be decided throughout Government, and with Treasury agreement. However, it would enhance local government's ability to deliver its services more effectively and efficiently, and there would be benefits to the public good as a result.